Research shows the use of AI within the deal-making process is now non-negotiable

A staggering 99% of dealmakers indicated that their respective corporate and private equity organizations have begun incorporating
Generative AI or advanced data analytics into their deal-making processes, according to new research from Deloitte.

The consultancy giant’s annual M&A Global Trends report surveyed 1,500 corporate and private equity dealmakers. Nearly two-thirds (63%) were senior decision-makers at the C-suite or senior managing director level, another high-water mark.

Diving a bit deeper into the data, while all respondents have been digitally enabling all phases of deal-making, private equity organizations are somewhat ahead of corporations in this regard.

This isn’t surprising given the different business models, generally shorter timelines, and returns typically obtained by scaling digital transformation across a portfolio, all of which are resident within private equity.

A rosier picture

Despite waves of economic volatility, Deloitte’s survey showed key performance metrics were resilient. More than three-quarters of respondents—79% of corporate leaders and 86% of private equity leaders—expect an increase in deal volume over the next 12 months.

Deloitte noted that leaders who responded reported that their organisations have shown significant increases in a number of key performance metrics, such as operating model health, workforce satisfaction and engagement, expectations for demand, and customer satisfaction.

There was also a sign of a rebound in the market. US deal making has been in the downturn, but 27% of respondents said they were focused on restructuring now or plan to be doing so within the next six months.

When asked what factors drive the success of M&A deals, both corporate and private equity respondents ranked definition of a coherent and well-supported M&A strategy as most important. Each also reported a strong focus on deal valuation—the second-ranked factor for corporate leaders and the third-most for private equity.

Digital transformation is key

The survey cemented the fact that firms have made real progress with digital transformation and shifting focus in search of cross-border value creation.

In addition to the growing us of AI within the deal making process, corporate and private equity interest in international targeting to find value has increased 22% in the past two years.

“On digital transformation, while all respondents have been digitally enabling all phases of dealmaking, private equity organizations are somewhat ahead of corporations in this regard,” Deloitte said in the report.

“This isn’t surprising given the different business models, generally shorter timelines, and returns typically obtained by scaling digital transformation across a portfolio, all of which are resident within private equity.”

Meanwhile, despite the rising geopolitical turmoil, the big increase in international targeting is perhaps unsurprising given the challenging economic environment in the US and, as indicated by the survey, respondent interest in safer harbours abroad.

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